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San Jose and San Francisco top the list, but the city of Oakland is now among the top spots for high tech startups. Kimberly Tere reports. (Published Saturday, Mar 16, 2013)

Updated at 7:14 AM PDT on Monday, Mar 18, 2013

Program Director of DBL Investors Lisa Hagerman is quick to say that Oakland is a great place to do business.

She should know; her venture capital firm is backing five Oakland tech companies and hopes to find more. "The more that we see Oakland in a positive light, the more companies are going to choose to locate in Oakland and grow in Oakland," Hagerman said.

Oakland was ranked among the most attractive U.S. cities for tech startups according to a report out this week by the National Venture Capital Association.

San Jose and San Francisco topped the list, but the high cost of rent in those cities is making places like Oakland more attractive.

“The cost of living and creating a business is lower in Oakland than in San Jose and San Francisco,” said NVCA President Mark Heesen. “Things are just cheaper in the East Bay than opposed to the city or San Jose or Silicon Valley areas.”

“The amount of investment provided to Oakland-based firms is a clear indication that our city is one of the Bay Area’s innovation centers,” said Oakland Mayor Jean Quan. “In addition to being more affordable, Oakland offers a central Bay Area location, great weather and a skilled workforce.”

Oakland is quietly becoming a breeding ground for succesful startups giving birth to a revolution in field from food to on-line music. Streaming music site Pandora had its best day ever as a publicaly traded company last week when shares jumped 18-percent. Revolution foods, which makes affordable lunches for public schools, now delivers 120,000 meals daily thanks to its central location in Oakland.

Other factors in Oakland’s favor include proximity to research institutions like the University of California - Berkeley and Lawrence Berkeley National Lab, a moderate climate and abundant green space including Lakeside Park, just steps from downtown.